West-Coast Port Fiasco Does ‘Permanent, Irrevocable Damage’
by Wolf Richter
WolfStreet.com
March 6, 2015
The labor dispute that wreaked havoc on West Coast ports and on shippers for months was tentatively settled on February 20. By then, it was too late.
Cargo had been delayed for weeks. Perishable goods with sell-by dates were stuck in refrigerated containers somewhere. Companies around the country spent endless working hours to keep the supply chain from collapsing. Cargo was shipped by air at a big additional cost. Demurrage charges and other costs piled up. Manufacturers, like Honda, ran out of parts and had to cut production…. It was a fiasco shippers won’t forget.
Growers in the Central Valley of California, when they want to export their produce to Asia, don’t have a choice. Shipping these goods across the country to ports on the East Coast or the Gulf or to Canada is too costly and takes too long. Other companies have the same problem. They’re captive customers of the West Coast ports. But not every company has that problem.
There is the near-term impact.
“Damage to the first quarter is done, and there’s nothing we can do about it,” Journal of Commerce economist Mario Moreno told the annual TPM Conference in Long Beach.
In January, the volume of US containerized imports was down 10% from a year ago. West Coast ports, which handled about 54% of the imports last year, weighed heavily. For instance, at the Port of Los Angeles, volume plunged 28%, at the Port of Oakland 32%!
The Rest…HERE
